Business correspondent is a bank-in-person. It is a person that is authorized to collect small deposits and extend small credits on behalf of the banks. Business correspondent is also permitted to: recover the principal interest of small value deposits, sale of micro insurance products, sell mutual funds products, deliver small value remittances. Usually business correspondent is non-government organization (NGO), micro-finance institution (often society), some types of companies, e.g. telecoms.
The business correspondent in India was allowed by the Reserve Bank of India in 2006. He is permitted to represent multiple banks, which increases interoperability. The institution of business correspondent allows inhabitants of small villages and distant regions to use bank services. It helps increase speed of development of those regions.
- Mahajan, S. S., & Kalel, N. (2013). An Assessment of Potential Financial Inclusion of Slum Dwellers Through Business Correspondent Model. IUP Journal of Bank Management, 12(4).
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